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Arpit Gupta spoke in quick, nervous spurts as he pitched his business idea to a group of investors; his three partners fidgeting in their seats. The aim is to provide inventory management solutions to small and medium-sized businesses with the help of data analytics, the 20-something said. “Why do you think the business is viable,” somebody in the audience asked. For a moment, Gupta was thrown off guard. But he recovered quickly and managed to convince the questioner.

At the end of the event, Gupta and his partners won a princely sum of Rs 30,000 for their business Flame Systems. Yes, you heard it right – Rs 30,000. The amount may be a pittance for someone trying to set up a business but comes as a booster dose of confidence for young entrepreneurs like Gupta, an engineering student at BITS Pilani. And that exactly was the objective of the event in Jaipur – giving a shot in the arm to budding entrepreneurs in a bid to make the Pink City a startup hub.

The Rajasthan Startup Fest 2015, held on October 9-10, aimed to make the city known more for its centuries-old forts and palaces to also a hotbed of new ideas that can take the desert state fast forward into the 21st century. The event brought together more than two dozen startups as well as angel investors and venture capital funds such as IvyCap Ventures, Rajasthan Venture Capital Fund, Unitus Seed Fund and Seedfund.

Although such events are dime a dozen in big cities like Mumbai, Bangalore and Delhi, the Jaipur fest had a personality of its own. Rather than the frantic exchanging of business cards, as is the norm elsewhere, at Jaipur there was friendly banter among startup founders, many of whom probably grew up together, and the occasional hoots from friends who cheered at their friends’ startup pitches, with a spattering of Rajasthani praises.

The event’s highlight was the business plan competition where college students presented their ideas to seasoned investors, who questioned the viability and soundness of each business model. While the presentations might not have been as polished and the startups present there not as evolved as those at big-city events, the ideas were as interesting – from software services and waste management to a hyper-local delivery service. And then there were Jaipur-based Stonewale.com, which sells stone art and mosaic sculptures, and Udaipur-based snacks maker Neu Tree Ventures.

Gupta and his partners – Naman Singhal, Rohan Singh and Aman Varma – came in at the second place among 50 groups that entered the competition. The first prize – Rs 50,000 – was won by a quartet from Jaipur’s LMN Institute of Information Technology. The idea from Kaustubh Khandelwal and his partners was called ‘Authentic – a software-as-a-service concept for securing online profiles of users.

Over two dozen startups and investors such as VC fund IvyCap Ventures and PE firms Unitus Seed Fund and Seedfund took part in the event

The third prize of Rs 20,000 went to BITS Pilani’s Pranav Kulkarni and IIM Shillong’s Ishan Pasrija and Cheena Pasrija. While Kulkarni wants to start a website that aggregates product reviews and generates insights, the IIM duo’s ‘Apna Chotu’ is intended to connect villagers with the opportunities present in nearby cities using a hyper-local e-commerce model.

More important than the prize money for the winners will be the opportunity to get co-working space from Startup Oasis for three months and web hosting credits of $1,000 from Amazon Web Services.

Startup Oasis is a Jaipur-based incubation centre launched recently by Rajasthan State Industrial Development & Investment Corporation and IIM Ahmedabad’s Centre for Innovation, Incubation and Entrepreneurship.

Tasting success

To be sure, Jaipur isn’t the only non-metro trying to become the next startup hub. Kochi has also become a hotbed for entrepreneurship; its Startup Village incubator is vying to become the next tech innovation destination. Startup activity is increasing also in Chandigarh, Bhopal and Kolkata.

The Rajasthan government is now moving quickly to establish Jaipur as a startup hub. At the October event, the state announced a startup policy – the first in India – to make it easier for entrepreneurs to start business. It has also allocated $8.3 million to help set up 500 startups in five years.

Prize winners of the Student Business Plan Competition with Rajasthan chief secretary CS Rajan (fourth from right)and other dignitaries at the Jaipur Exhibition and Convention Centre.

A few other states including Karnataka, Telangana and West Bengal have also either announced measures to support startups or plan to do so. In fact, the central government also plans to unveil steps to promote startups.

So, can a small town like Jaipur produce the next billion-dollar unicorn?

Jaipur already has produced a handful of success stories such as CarDekho and CultureAlley. Auto portal CarDekho.com was founded by siblings Amit and Anurag Jain seven years ago. It has acquired three companies in the past year, with the latest being Zigwheels from Times Internet Ltd.

Intap Labs Pvt Ltd runs cloud-based CultureAlley and the HelloEnglish app, among the most popular language learning platforms in the country. It raised $6.5 million in Series A funding from venture capital firm Tiger Global Management and other investors in July this year.

Jaipur-based CarDekho.com has acquired three companies in the past year, including Zigwheels from Times Internet Ltd

Entrepreneurs say there are some advantages of not being in a non-metro city – low costs and access to an unconquered market, for instance. “Any startup would like to reduce its day-to-day expenses and Jaipur provides that when compared to areas like Delhi-NCR, Mumbai or Bangalore,” says Harsh Sharma of Jaipur-based Bharat Helpline, which aggregates local service providers.

Shefali Bansal, marketing manager at real estate consultancy Propterry, agrees with Sharma. “Jaipur has relatively lower operations cost, which has proved to be a boon for us,” she says.

Success stories in Jaipur also have a chance of getting attention at the state level, which might not be the case for startups in metros that might get lost in the rat race. “In a way it is hard to build a good team initially and also to raise seed funding. But once you are a bit established, it gets easy to get people from cities like Delhi, Mumbai or Bangalore who are originally from Jaipur,” says Sahil Agrawal, co-founder of inter-city taxi operator HippoCabs.

Long road

Of course, it will take a lot of time for Jaipur to compete with Bangalore, Mumbai or Delhi. “The startup ecosystem in Jaipur is not as evolved as Bangalore or Mumbai, but the wave of budding startups in the city will certainly change the face of the ecosystem,” says Aman Mamodia, co-founder of Rough Apple, a Jaipur-based startup that produces customized merchandise online.

Mamodia says Jaipur also doesn’t have the resources required to produce world-class products or services. “We spent months searching for the right manufacturer in Jaipur, but didn’t find one. Finally, we outsourced our product to the metros,” he says.

Abhijeet Modi, who co-founded Rough Apple, adds that the city also needs an active network of angel investors who can fund and mentor startups.

Several investors present at the event voiced concerned at the level of maturity in startups from smaller cities and their tendency to copy successful ventures in bigger cities. “While the number of startups is growing, these are initial days and the ventures here may take some time to mature,” says Anil Joshi, founder of Unicorn India Ventures.

Entrepreneurs say startups in Jaipur do not have access to technology and investment opportunities their peers in big cities enjoy. Some also feel that Jaipur is more conservative than, say, Bangalore when it comes to accepting new ideas. “People in small towns don’t easily trust startups,” says Bansal of Propterry. “But things are changing.”